CDFIs and Alternative Lenders are Helping Small Businesses Grow

As banks and traditional lenders continue to lag in helping small businesses access the capital they need to grow, there has been more media attention paid to nontraditional sources of capital for small businesses. Earlier this month, the New York Times wrote a piece talking about the creative alternative ways that entrepreneurs and start-up companies have been accessing capital to help their dreams grow. They highlight a number of options, including the increased role of non-bank loans from for-and non-profit organizations.

While the article does emphasize that these options can cost more than traditional lending, it does not truly highlight the world of non-profit Community Development Financials Institutions (CDFIs). CDFIs exist to help provide access to capital to those that are not served by traditional lenders, in part due to restrictive underwriting practices.

Fortunately, there have been a number of pieces written this weekend highlighting the role and impact CDFIs are having on Main Street across the nation. These stories are coming from Miami and Philadelphia, and even here in North Carolina. The News and Observer this weekend had an article highlighting one of The Support Center’s and Generation’s borrowers, Jackie Green, and how the CDFI and CDCU were able to work together to help her small bakery grow. The article also highlights the role of local CDFIs, such as The Support Center, Self-Help, and Latino Community Credit Union in providing loans to borrowers turned down from traditional lenders.

We hope that other small businesses will be able to hear these stories and understand that there are still lenders available who will look at the whole business and work hard to help the business grow.